Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Thelma Walley,
Petitioner,
- v. -
The Inspector General.
DATE: June 9, 1992
Docket No. C-409
DECISION
On June 14, 1991 the Inspector General (I.G.) notified Petitioner that she
was being excluded from
Medicare and from any State health care program for a period of five years.
1/ The I.G. stated that
Petitioner was being excluded as a result of her conviction of a criminal offense
related to the delivery of
an item or service under the Texas Medicaid program. Petitioner was advised
that the exclusion of an
individual convicted of such an offense was mandated by section 1128(a)(1) of
the Social Security Act
(Act). The I.G. further advised Petitioner that the law required that the minimum
period of such an
exclusion be for not less than five years. The I.G. informed Petitioner that
she was being excluded for the
minimum period mandated by law.
Petitioner timely requested a hearing. The I.G. moved for summary disposition,
and Petitioner opposed the
motion. On December 10, 1991, I issued a Ruling denying the I.G.'s motion. I
concluded that the I.G. had
failed to adduce undisputed material facts sufficient to prove that Petitioner
had been convicted of an
offense within the meaning of section 1128(a)(1) of the Act.
On January 9, 1992, the I.G. renewed his motion for summary disposition. This
motion was again opposed
by Petitioner. On February 21, 1992, I held a prehearing conference by telephone
and I advised the parties
that I was denying the I.G.'s renewed motion for summary disposition, because
there remained disputed
issues of material fact which had not been resolved by the I.G.'s submissions.
At that time, the I.G.
requested an evidentiary hearing in order to offer evidence to prove that Petitioner
had been convicted of a
criminal offense within the meaning of section 1128(a)(1) of the Act. I set
a hearing for May 19, 1992 in
Dallas, Texas. Order and Notice of Hearing, February 24, 1992.
On March 27, 1992, the I.G. again renewed his motion for summary disposition.
Petitioner opposed this
renewed motion, as she had opposed the first two motions, on the ground that
the I.G. failed to adduce
undisputed material facts which proved that Petitioner had been convicted of
a criminal offense within the
meaning of section 1128(a)(1) of the Act. I concluded, as I had with the I.G.'s
first two motions, that the
I.G. had failed to prove a statutory basis to exclude Petitioner, and I denied
the I.G.'s renewed motion for
summary disposition.
On April 28, 1992, the I.G. filed additional documents concerning this case,
effectively moving a fourth
time for summary disposition. Petitioner again opposed the I.G.'s motion. After
reviewing the I.G.'s April
28 submission and Petitioner's opposition, I concluded that there no longer
remained disputed issues of
material fact in this case and I advised the parties that I would issue a decision
without conducting the in
person evidentiary hearing which had been requested by the I.G.
Based on the undisputed material facts, the law, and the parties' arguments,
I conclude that Petitioner was
convicted of a criminal offense, within the meaning of section 1128(a)(1) of
the Act. I find that the
exclusion imposed and directed against Petitioner by the I.G. was mandated by
law. Therefore, I enter
summary disposition in favor of the I.G., sustaining the I.G.'s exclusion determination.
ISSUE
The issue in this case is whether Petitioner was convicted of a criminal offense
related to the delivery of an
item or service under the Texas Medicaid program, within the meaning of section
1128(a)(1) of the Act.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. Petitioner is a licensed vocational nurse who was working at the Stanford
Convalescent Center in Fort
Worth, Texas, in August 1990. I.G. Ex. 1, Att. 2. 2/
2. On September 11, 1990, Petitioner was charged in a Texas court with two
counts of the criminal offense
of unlawfully destroying tangible property belonging to other individuals. I.G.
Ex. 1, Att. 3, 4.
3. In each count, Petitioner was charged with having unlawfully destroyed one
tablet of the drug Klonopin,
on August 22, 1990. I.G. Ex. 1, Att. 3, 4.
4. The individuals whose medications Petitioner was charged with having destroyed
were named Nancy
Dayton and Frances Moore. I.G. Ex. 1, Att. 3, 4.
5. On September 21, 1990, Petitioner pled nolo contendere to both of the criminal
charges which had been
filed against her. I.G. Ex. 1, Att. 5, 6.
6. On September 21, 1990, a Texas court found Petitioner guilty of both of
the criminal charges which had
been filed against her, based on her nolo contendere pleas to those charges.
I.G. Ex. 1, Att. 5, 6.
7. Nancy Dayton and Frances Moore were patients at the Stanford Convalescent
Center on August 22,
1990. I.G. Ex. 3, Att. 8, 9; I.G. Ex. 4.
8. On August 22, 1990, Nancy Dayton and Frances Moore were receiving items
or services which were
reimbursed by the Texas Medicaid program. I.G. Ex. 3, Att. 8, 9; I.G. Ex. 4.
9. Petitioner was convicted of a criminal offense. Findings 5, 6; Social Security Act, section 1128(i).
10. Petitioner was convicted of a criminal offense related to the delivery
of an item or service under
Medicaid, within the meaning of section 1128(a)(1) of the Act. Findings 1 -
8; Social Security Act, section
1128(a)(1).
11. The Secretary of the Department of Health and Human Services (Secretary)
delegated to the I.G. the
authority to determine, impose, and direct exclusions pursuant to section 1128
of the Act. 48 Fed. Reg.
21662 (May 13, 1983).
12. There are no disputed issues of material fact in this case and summary disposition is appropriate.
13. The exclusion imposed and directed against Petitioner by the I.G. is for
five years, the minimum
period required under the Act. Social Security Act, sections 1128(a)(1) and
1128(c)(3)(B).
14. The exclusion imposed and directed against Petitioner by the I.G. is mandated
by law. Findings 1 - 10;
Social Security Act, sections 1128(a)(1) and 1128(c)(3)(B).
ANALYSIS
The issue which is central to this case is whether Petitioner was convicted
of a criminal offense related to
the delivery of an item or service under the Texas Medicaid program, within
the meaning of section
1128(a)(1) of the Act. Based on the facts adduced by the I.G., which have not
been meaningfully
challenged by Petitioner, I conclude that the I.G. has proven that Petitioner
was convicted of a program-
related offense, within the meaning of section 1128(a)(1). Therefore, the exclusion
imposed and directed
by the I.G., which was for the minimum period required for individuals whose
convictions fall within
section 1128(a)(1), was mandated by law.
The facts which neither side disputes are that Petitioner was working as a
nurse at the Stanford
Convalescent Center, a health care facility in Fort Worth, Texas. Based on an
investigation conducted by
the Texas Attorney General's Office, Petitioner was charged with two criminal
offenses. She was alleged
to have unlawfully destroyed medication belonging to two individuals, identified
in the criminal
complaints as Nancy Dayton and Frances Moore. On September 21, 1990, Petitioner
entered a plea of nolo
contendere in a Texas court to each of the charges. The court found Petitioner
guilty of both offenses with
which she was charged, based on her nolo contendere pleas.
A threshold issue in this case is whether Petitioner was convicted of a criminal
offense, within the meaning
of section 1128(i) of the Act. Petitioner contends that she made her nolo contendere
pleas premised on
assurances that there would be no additional actions taken against her beyond
the criminal penalties which
would result from her pleas and the Texas court's adjudication of her case.
From this, Petitioner asserts that
the disposition of her case in Texas does not constitute a conviction of a criminal
offense, within the
meaning of the Act. Petitioner apparently contends that the I.G. is now estopped
from treating the
adjudication as a conviction in light of the representations which were ostensibly
made to Petitioner by
Texas officials in order to induce her to make nolo contendere pleas.
I find that Petitioner was convicted of a criminal offense, within the meaning
of section 1128(i)(3) of the
Act. That section defines a "conviction" to include a court's acceptance
of a party's plea of nolo
contendere. Petitioner's nolo contendere pleas were accepted by the Texas court.
The Act does not
exclude from its definition of a "conviction" in section 1128(i)(3)
estoppel arising from statements which
may have been made to a party in order to induce that party to offer a nolo
contendere plea.
In his original motion for summary disposition, the I.G. contended that the
undisputed facts which I have
recited supra in this Analysis supported his contention that summary disposition
should be entered in his
favor. The I.G. premised this contention on his theory that Petitioner was convicted
of a criminal offense
which was "related to" the delivery of an item or service under Medicaid
because she was convicted of a
crime which occurred in the course of her employment by a provider which receives
reimbursement from
Medicaid for items or services. I concluded that this theory did not comport
with the requirements of the
Act. I reaffirm my conclusion here.
The argument which the I.G. made in his initial motion for summary disposition
is identical to that which
he made in Catherine Dodd, DAB CR184 (1992) (Dodd). In Dodd, I found this argument
to be
unsupported by the Act. I concluded in my Ruling on the I.G.'s initial motion
in this case, and in Dodd,
that section 1128(a)(1) cannot legitimately be interpreted as loosely as the
I.G. advocates. Section
1128(a)(1) specifically requires that, as a basis for an exclusion, a party
must be convicted of a criminal
offense related to the delivery of an item or service under Medicare or Medicaid.
The fact that an
individual commits a crime during the course of his or her employment by a facility
which receives
Medicare or Medicaid reimbursement is not in and of itself sufficient to meet
the statutory test, because
such a conviction would not necessarily relate to the delivery of a Medicare
or Medicaid item or service.
The I.G.'s theory, expressed in his initial motion for summary disposition,
is so broad as to make any
criminal offense committed on the premises of a facility which receives Medicare
or Medicaid
reimbursement a program-related criminal offense within the meaning of section
1128(a)(1). As I
observed in Dodd, the logical extension of the I.G.'s theory would be that an
individual would be found to
have committed an offense related to the delivery of an item or service under
Medicare or Medicaid if he
were convicted of a simple battery of a coworker on the premises of a facility
which receives Medicare or
Medicaid reimbursement. Dodd at 8. This analysis departs from the plain meaning
of the Act.
Furthermore, it would make section 1128(a)(1) so broad in its application as
to render virtually
meaningless the remainder of sections 1128(a) and (b). Id.
The Act does not define the term "criminal offense related to the delivery
of an item or service." However,
a criminal offense has been held to meet the statutory test where the delivery
of an item or service is an
element in the chain of events giving rise to the offense. Jack W. Greene, DAB
1078 (1989) (Greene),
aff'd sub nom. Greene v. Sullivan, 731 F. Supp. 835, 838 (E.D. Tenn. 1990);
Larry W. Dabbs, R.Ph. et al.,
DAB CR151 (1991) (Dabbs); Dodd. A criminal offense has also been held to meet
the statutory test where
the unlawful conduct can be shown to affect an identifiable Medicare or Medicaid
item or service or to
affect reimbursement for such an item or service. DeWayne Franzen, DAB 1165
(1990) (Franzen); Danny
E. Harris, R.Ph., DAB CR166 (1991) (Harris). Finally, a criminal offense has
been held to meet the
statutory test where either Medicare or a Medicaid program is the victim of
the crime. Napoleon S.
Maminta, M.D., DAB 1135 (1990) (Maminta).
In Dodd, I held that the requisite relationship could be proven under the Greene
test by showing that the
criminal offense at issue involved a patient or patients who were receiving
Medicare or Medicaid items or
services at the time of the offense. Similar to that which is at issue in this
case, the offense in Dodd
involved a conviction for an unlawful conversion of patients' medications by
a nurse employed at a health
care facility where the patients were hospitalized. I found that the I.G. could
meet his burden of proof
under section 1128(a)(1) by proving that: (1) the patients who were involved
in the offense were Medicare
beneficiaries or Medicaid recipients; and (2) that these patients were receiving
some Medicare or Medicaid
items or services (such as coverage for their stays in the facility) at the
time that the petitioner committed
her offense. I held that, under those circumstances, I could conclude that the
delivery of an item or service
under Medicare or Medicaid would be an element in the chain of events giving
rise to the petitioner's
offense. 3/
I also denied the I.G.'s initial motion for summary disposition in this case
because the I.G. failed to prove
that Petitioner's conviction related to the delivery of an item or service under
Medicare. I relied on the
holdings of Greene, Dabbs, Franzen, Harris, and Maminta. The I.G. subsequently
attempted to adduce
evidence which would satisfy the Greene test. I now conclude that the test has
been satisfied by the
undisputed material facts contained in the most recent exhibits offered by the
I.G. (I.G. Ex. 3, Att. 8, 9; I.G.
Ex. 4). For that reason, I now enter summary disposition in favor of the I.G.
I conclude that the additional exhibits offered by the I.G. prove two facts,
necessary to meet the Greene
test, which had not previously been adduced by the I.G. First, the two patients
whose medications were
unlawfully destroyed by Petitioner, Nancy Dayton and Frances Moore, were eligible
to receive Medicaid-
covered items or services at the time of the offenses. Second, these two individuals
were receiving
Medicaid-covered items or services at the time of the offenses. 4/ Both Ms.
Dayton and Ms. Moore's stays
at the Stanford Convalescent Center on August 22, 1990, the date of Petitioner's
offenses, were covered by
Medicaid. I.G. Ex. 3, Att. 8, 9. The medications which Petitioner unlawfully
destroyed emanated from
these covered stays. But for these patients' hospitalization at the Stanford
Convalescent Center on August
22, 1990, Petitioner would not have been in a position to destroy their medications.
Therefore, Petitioner's
conviction for unlawful destruction of medications related to the delivery of
Medicaid items or services --
Ms. Dayton and Ms. Moore's Medicaid-covered stays -- thereby satisfying the
Greene test and proving the
requisite relationship under section 1128(a)(1) of the Act. 5/
Petitioner contends that there remain disputed issues of material fact in this
case, which precludes the entry
of summary disposition in favor of the I.G. He asserts that Sharon Thompson,
the affiant who executed
I.G. Ex. 2, is not the custodian of the records which consist of Attachments
8 and 9. Therefore, according
to Petitioner, the I.G. has failed to prove that Attachments 8 and 9 are authentic
and that the facts contained
in these documents are true.
I do not agree with these arguments. Ms. Thompson's affidavit establishes that
Attachments 8 and 9 are
excerpts from an automated data filing system which is maintained by the Texas
Department of Human
Services (TDHS). These exhibits plainly are business records kept in the ordinary
course of business by
TDHS. They are excerpted from data used by TDHS to determine Medicaid recipients'
eligibility and
Medicaid payment history. I am satisfied from Ms. Thompson's affidavit that
Attachments 8 and 9 are
what Ms. Thompson represents them to be. Petitioner has not raised a meaningful
contention that the
attachments do not contain accurate data routinely generated by TDHS in the
ordinary course of business.
Therefore, the facts asserted by Ms. Thompson in her affidavit and supported
by Attachments 8 and 9 are
not in dispute.
CONCLUSION
Based on the undisputed material facts and the law, I conclude that Petitioner
was convicted of a criminal
offense related to the delivery of an item or service under Medicaid, within
the meaning of section
1128(a)(1) of the Act. The five-year exclusion which the I.G. imposed and directed
against Petitioner was
mandated by law. I enter summary disposition in favor of the I.G., sustaining
the exclusion.
_________________________
Steven T. Kessel
Administrative Law Judge
1. "State health care program" is defined by section 1128(h) of the
Social Security Act to cover three
types of federally-financed health care programs, including Medicaid. I use
the term "Medicaid" hereafter
to represent all State health care programs from which Petitioner was excluded.
2. The I.G. filed an affidavit by a program analyst, William Hughes (Hughes),
in support of his first
motion for summary disposition. That affidavit had seven attachments. For purposes
of the record, I am
designating this Hughes affidavit and the seven attachments as I.G. Exhibit
1. I refer to it and to any of its
attachments as follows: "I.G. Ex. 1, Att. (number)." On April 28,
1992, the I.G. filed two additional
affidavits. These consist of an affidavit of Sharon E. Thompson (Thompson) and
a second Hughes
affidavit. For purposes of the record, I am designating the Thompson affidavit
as I.G. Exhibit 2, and I refer
to it as "I.G. Ex. 2." I am designating the second Hughes affidavit
as I.G. Exhibit 3. The two attachments
to the second affidavit are numbered attachments 8 and 9. Therefore, I refer
to I.G. Exhibit 3 and to any of
its attachments as "I.G. Ex. 3, Att. (number)." Finally, the I.G.
also filed, on April 28, 1992, a document
entitled "Contract to Provide Intermediate Care Services Under the Texas
Medical Assistance Program." I
am designating this document as I.G. Exhibit 4, and I refer to it as "I.G.
Ex. 4." I am admitting I.G. Ex. 1 -
4 into evidence at this time. Petitioner filed three exhibits. I refer to these
documents as "P. Ex.
(number)." I am admitting P. Ex. 1 - 3 into evidence at this time.
3. In Dodd, I held that the I.G. failed to prove the requisite nexus to satisfy
the test set forth in section
1128(a)(1). Therefore, I entered summary disposition in favor of the petitioner.
4. It would not be sufficient for the I.G. simply to prove that the individuals
were eligible for benefits.
The Act requires that the offense be related to the delivery of an item or service
under Medicare or
Medicaid.
5. The I.G. proved that Petitioner's convictions of both offenses related to
the delivery of a Medicaid
item or service. The I.G. would have met the statutory test under section 1128(a)(1)
had he proved that
either conviction was for an offense which was related to the delivery of a
Medicaid item or service.